The deadline for the Appendix 4 report for 2025/26 tax year to be submitted to HMRC is 31 May 2026. This is relevant for businesses that send employees to work in the UK.

What the Appendix 4 arrangement does

Ordinarily, when an overseas employee works for a UK entity from the UK, that entity must operate PAYE on their earnings from day one. That can be burdensome, particularly when the employee is here for a limited time.

The Appendix 4 arrangement offers a practical alternative. Employers who have agreed one with HMRC don't need to run real-time PAYE for qualifying short-term business visitors ( . Instead, the business travel is reported to HMRC once a year, after the tax year ends.

Who qualifies?

Not every business traveller to the UK falls within the arrangement. To qualify, they must meet conditions of the double taxation agreement between the UK and their “home” country. Double tax agreements can vary, but generally the requirements are:

  • The employee is tax resident in their “home” country.
  • The employee is present in the UK for not more than 183 days in the relevant period (usually a rolling 365-day period).
  • The employee is not paid by (or on behalf of) a UK-resident entity.
  • The cost of their employment is not recharged to an entity with a UK permanent establishment.

These conditions are subject to two further overlays: the “the “economic employer principle” and the “60-day rule”.

The “economic employer principle”

One of the conditions of the double taxation agreement is that the employee must not be paid by or on behalf of a UK entity. On this point, HMRC will go beyond the formal employer to look at the economic reality. If a UK entity controls, directs, and benefits from the visitor's work, HMRC may treat that entity as the economic employer — even if the overseas company pays the salary. That analysis can disqualify a visitor from Appendix 4 relief entirely – unless the 60 day rule applies.

The “60-day rule”

HMRC applies a concession referred to as the “60-day rule”.  If a business traveller spends fewer than 60 days in the UK, HMRC simply require that they are employed by and paid by the overseas employer. HMRC disregard the economic employer principle, and the question of which entity bears the cost.

Any part of any day spent in the UK counts for these purposes (even non-workdays), and all days during “linked periods” are included, even if those periods span multiple tax years. HMRC will consider factors such as:

  • whether there is an expectation that the business traveller will return to the UK after they depart;
  • the gaps between visits in comparison with the length of visits;
  • frequency of travel; and
  • how integral to the business are the UK duties.

Whether periods are “linked” can be difficult to determine and generally advice should be sought.

What goes in the report to HMRC?

The information required depends on the number of days the employee has spent in the UK. If an employee meets the “60-day rule” they might not need to be named.

Whereas for other employees you might need to include their name, home country, the dates they worked in the UK, the number of UK workdays, and the amount of UK-taxable earnings. For business travellers who have spent more than 90 days in the UK in a tax year, a certificate of residence from the “home” country is required.

Employers will also need to confirm that each visitor met the relevant conditions throughout the period.

The importance of record keeping

The hard part isn't the filing itself. It's the record-keeping that feeds into it. Many businesses struggle to track who visited, when, and for how long. If your people travel frequently between jurisdictions, the data can scatter across visa records, travel bookings, expense claims, and individual recollections.

We see employers caught out every year because they didn't capture visitor data in real time. Reconstructing a full year's travel history in May is painful, and a simple tracker which is updated as visits happen is always advisable.

What next?

With the end of the tax year behind us, we'd recommend reviewing your visitor records for the 2025/26 tax year now and confirming that every visiting employee met the qualifying conditions.

If you don't yet have an Appendix 4 arrangement in place but regularly receive overseas workers on short UK assignments, it is advisable to consider whether applying for one would reduce your compliance burden going forward.

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